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Item 7. Management’s Discussion and Analysis

2026-03-05 compared with 2025-04-15 · 95 added, 230 removed, 205 unchanged (61% of the section changed)

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The following discussion and analysis of the financial condition and results of operations of TriSalus Life Sciences, Inc.

(for purposes of this section, the “Company,” “TriSalus” “we,” “us” and “our”) should be read together with TriSalus’ audited consolidated financial statements as of and for the fiscal years ended December 31, 2024 and 2023, together with the related notes thereto, included elsewhere in this Annual Report.

(for purposes of this section, the “Company,” “TriSalus” “we,” “us” and “our”) should be read together with TriSalus’ consolidated financial statements as of and for the fiscal years ended December 31, 2025 and 2024 , together with the related notes thereto, included elsewhere in this Annual Report.

Some of the information contained in this discussion and analysis includes forward-looking statements that involves risks and uncertainties.

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Our advanced technology is designed for use by interventional radiologists to enhance the delivery of therapeutics and improve patient outcomes.

We market our cutting-edge Pressure Enabled Drug Delivery (PEDD™) infusion systems, which optimize therapeutic delivery for hepatocellular carcinoma, pancreatic cancer, and other solid liver tumors.

We market our cutting-edge PEDD infusion systems, which optimize therapeutic delivery for hepatocellular carcinoma, pancreatic cancer and other solid liver tumors.

Additionally, we are pursuing the development of nelitolimod to illustrate how an immunotherapeutic--when administered via PEDD in combination with systemic treatment can enhance the effectiveness of other therapeutics, ultimately leading to better patient responses.

The combination of our PEDD technology with nelitolimod is focused on solving the two main barriers in the tumor microenvironment that inhibits the success of immunotherapy.

The first barrier (mechanical) is comprised of high

intratumoral pressure within tumors that limits drug uptake and the second barrier (biological) is the reversal of intratumoral immunosuppression.

The first barrier (mechanical) is comprised of high intratumoral pressure within tumors that limits drug uptake and the second barrier (biological) is the reversal of intratumoral immunosuppression.

In 2020, we launched TriNav, which is our newest liver therapy delivery device with SmartValve technology for our proprietary PEDD approach.

Current sales consist of the TriNav Infusion System, introduced in 2020.

In 2020, we gained transitional pass-through payments (“TPT”) approval from the Centers for Medicare & Medicaid Services (“CMS”), which allows hospitals to cover the cost of using TriNav.

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This new code provides reimbursement clarity for mapping procedures conducted prior to TARE.

TriSalus recently expanded its portfolio of PEDD devices with the launch of the TriNav LV Infusion System and TriGuide Guiding Catheter to optimize therapeutic delivery for patients with larger vessels.

The TriNav LV is suitable for patients with vessels sized between 3.5 and 5.0mm and is expected to allow us to meaningfully expand our addressable liver embolization market.

The TriGuide Guiding Catheter has a larger inner diameter, lubricious inner lining, and reverse curve design to support femoral access for the TriNav LV, which we believe will enhance procedural efficiency.

These new products are eligible for the same HCPCS reimbursement codes as existing TriNav products, enabling seamless integration into current billing structures.

In 2025, TriSalus expanded its portfolio of PEDD devices with the commercial launch of the TriNav® FLX Infusion System and the TriNav XP Infusion System, further broadening the TriNav product family.

These systems complement the Company’s existing TriNav Infusion System, TriNav LV Infusion System and TriGuide Guiding Catheter and are designed to support therapeutic delivery across a broader range anatomical complexity.

The TriNav FLX Infusion System incorporates a more flexible distal tip, intended to improve trackability and navigation in tortuous vasculature.

While the TriNav XP Infusion System also includes the more flexible distal tip, it is also designed to support delivery of larger embolic particles, expanding procedural versatility across embolization applications.

Together with TriNav LV, which is suitable for vessels 3.5 mm to 5.0 mm in diameter, these products are intended to increase the addressable embolization market.

TriNav FLX and TriNav XP are eligible for the same HCPCS reimbursement codes as previously commercialized TriNav products, allowing for integration into existing reimbursement framework.

TriSalus also initiated a registry study called PROTECT (Pressure Enabled Retrograde Occlusive Therapy with Embolization for Control of Thyroid Disease) and intends to enroll 100 patients across five leading academic sites.

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We estimate that this could expand the addressable market by approximately 50,000 procedures, representing an incremental $400 million market opportunity.

This new procedure utilizing the TriNav system is also eligible for the same Healthcare Common Procedure Coding System (HCPCS) reimbursement code allowing for seamless integration into current billing approaches.

We are currently in our early stage of development and have yet to generate revenues sufficient to drive positive cash flows from operations.

Beginning in 2020, we began a strategic transformation from a company focused solely on the sale of our infusion systems to a therapeutic company whereby our medical devices are marketed alongside the pharmaceutical drugs and other treatments that the devices deliver to patients.

This transformation led us to acquire our first immune-oncology drug, nelitolimod, in July 2020, and to begin clinical development of nelitolimod for the treatment of liver and pancreatic cancers We have initiated Phase 1 and Phase 1b clinical trials for nelitolimod, each of which are focused on a different target indication, specifically UMLM, ICC and HCC, and pancreatic cancer.

Continued investigation for ICC and HCC may continue through IITs.

Based on the changing landscape for second line treatment of uveal melanoma, we do not intend to proceed to Phase II trials for that indication on our own, but we are looking for potential partners to advance that indication.

Our Phase I PERIO-03 clinical trial in pancreatic cancer is enrolled and we anticipate data from the study will be available in sometime in 2025, depending on when treatment is completed.

The Business Combination

On November 11, 2022, Legacy TriSalus entered into an Agreement and Plan of Merger (the “Merger Agreement”) with MedTech Acquisition Corporation (“MTAC”) and MTAC Merger Sub, Inc., a wholly owned subsidiary of MTAC (“Merger Sub”), pursuant to which, Legacy TriSalus would merge with and into Merger Sub, with Legacy TriSalus surviving the merger and becoming a wholly owned subsidiary of MTAC (the “Business Combination”).

The aggregate consideration payable to the stockholders of Legacy TriSalus was $220.0 million, payable in approximately 22,000,000 shares of MTAC common stock.

On August 8, 2023, the stockholders of MTAC approved the Business Combination, and the Business Combination closed on August 10, 2023.

Pursuant to the terms of the Merger Agreement, 890,020,482 shares of Legacy TriSalus common stock (after conversion of all outstanding shares of Legacy TriSalus preferred stock and all in-the-money warrants) were exchanged their equity holdings at an exchange ratio of 0.02471853 (the “Exchange Ratio”) for an aggregate of 22,000,000 shares of our Common Stock.

In addition, MTAC had previously issued public warrants and private placement warrants (collectively, the “MTAC Warrants”) as part of its initial public offering in November 2020.

All share and per share amounts of our common and preferred stock have been retrospectively adjusted for the exchange ratio in the following discussion.

Following the consummation of the Business Combination, we were deemed the accounting acquirer and are accounting for the Business Combination as a reverse recapitalization.

This new procedure utilizing the TriNav system is also eligible for the same HCPCS reimbursement code allowing for seamless integration into current billing approaches.

We are a high growth, high margin company approaching a level of revenues that can generate sufficient cash flow to sustain our operations.

Beginning in 2020, our mission was to improve the delivery of therapeutics to solid tumors across a range of different diseases and tumor types.

Additionally, we acquired an immune-oncology drug, nelitolimod, in July 2020, and conducted several Phase I clinical trials to study the ability and value of our PEDD technology.

We have completed Phase I dose escalation (UMLM and LA-PDAC) and Phase Ib (ICC/HCC) clinical trials for nelitolimod.

Due to physician and investigator interest, we are supporting two Investigator Initiated Trials of nelitolimod, one in patients with advanced HCC in combination with cryoablation, durvalumab and tremelimumab and another in patients with resectable colorectal liver metastases.

Due to the excessive cost of capital, we do not intend to proceed to Phase II trials for that indication on our own, but we are looking for potential partners to advance that indication.

Our PERIO-03 Phase I dose escalation in LA-PDAC has completed enrollment and we anticipate data from the study will be available in early 2026 and will begin discussions for a pharmaceutical partner for further clinical development.

Factors Affecting Our Performance

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Such changes in revenues would have a material adverse effect on our operating results and our overall financial condition.

• The success and cost of our clinical trials of nelitolimod .

• The success of our clinical trials of nelitolimod .

Nelitolimod is in Phase 1 human trials to determine if, when delivered via TriNav, it is safe and effective in treating certain cancers.

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Recent Developments

For the year ended December 31, 2024, we sold 2,290,377 shares of common stock under the SEPA, raising $14.1 million.

Additional Fund Raising

During the year ended December 31, 2024, we also raised an additional $1.0 million, before expenses, through the sale of common stock outside of the SEPA.

OrbiMed Credit Agreement

In April 2024 (the "OrbiMed Closing Date"), we entered into a credit agreement (the "OrbiMed Credit Agreement") with OrbiMed Royalty & Credit Opportunities IV, LP ("OrbiMed"), a healthcare investment firm.

The OrbiMed Credit Agreement provides for up to $50.0 million in senior secured term debt, of which (i) $25.0 million was made available to us on the Closing Date (the “Initial Commitment Amount”) and (ii) up to $10.0 million will be made available to us on or prior to June 30, 2025, and up to $15.0 million will be made available to us on or prior to December 31, 2025, in each case,

subject to the satisfaction of certain revenue requirements (such additional commitment amounts, the “Delayed Draw Commitment Amount”).

The term loan will mature on April 30, 2029.

On April 30, 2024, we borrowed the Initial Commitment Amount, resulting in gross proceeds of $25.0 million.

In connection with the closing of the Initial Commitment Amount, we also issued OrbiMed a warrant to purchase 130,805 shares of our common stock, with the initial exercise price of $9.5562 per share, or approximately $1.25 million in the aggregate, assuming none of the Initial OrbiMed Warrant is exercised through a "cashless" exercise.

For the year ended December 31, 2024, the exercise price was adjusted pursuant to the terms of the Initial OrbiMed Warrant to $9.3722 per share, or approximately $1.23 million in the aggregate.

The Initial OrbiMed Warrant expires on April 30, 2031.

On each of the closings of the Delayed Draw Commitment Amounts, if any, we agreed to issue additional warrants to purchase a number of shares of our common stock determined by dividing 5% of the applicable Delayed Draw Commitment Amount by the 10-day volume weighted average sale price of our common stock as of the issue date.

The Subsequent Warrants will expire seven years from each applicable issuance date, if any.

In connection with the Initial OrbiMed Warrants, we entered into a Registration Rights Agreement with OrbiMed, whereby OrbiMed will have certain customary registration rights with respect to the shares of common stock underlying the Initial OrbiMed Warrants.

Subsequent to December 31, 2024, we met the First Delayed Draw Term Loan Commitment and requested the additional $10.0 million term loan associated with the Second Tranche.

On February 18, 2025, we received gross proceeds of $10.0 million.

In connection with the closing of the First Delayed Draw, we issued OrbiMed 91,263 warrants on February 18, 2025.

The Subsequent OrbiMed Warrants are held by the two of OrbiMed's operating entities associated with the Initial OrbiMed Warrants;

one for 64,748 and the second for 26,515 common shares.

The Subsequent OrbiMed Warrants expire seven years from the issuance date and contain an exercise price of $5.4787.

Effective March 20, 2025, we executed the First Amendment To Credit Agreement and Registration Rights Agreement which required the registration of the Subsequent OrbiMed Warrants to be filed by May 15, 2025 and waived the prior default events related to the Series A Convertible Preferred Stock conversion in September 2024, February 2025, and March 2025.

Warrant Exchange Offering

On May 24, 2024, we announced the commencement of (i) our offer (the “Offer”) to all holders of each class of certain outstanding warrants (the “Warrants”), consisting of (a) our publicly-traded Warrants (the “Public Warrants”), (b) certain Warrants we issued in a private placement transaction occurring simultaneously with the closing of the Business Combination (the “Private Placement Warrants”) and (c) certain Warrants we issued for working capital requirements and payment of certain expenses (“Working Capital Warrants”), to receive 0.3 shares of our common stock in exchange for each Warrant tendered by the holder and exchanged pursuant to the Offer, and (ii) the solicitation of consents (the “Consent Solicitation”) from holders of the Warrants to amend the Warrant Agreement, dated as of December 17, 2020 (the “Warrant Agreement” and such amendment, the “Warrant Amendment”), by and between the Company and Continental Stock Transfer & Trust Company, which governs all of the Warrants.

Pursuant to the Offer, we offered up to an aggregate of 4,264,532 shares of our Common Stock in exchange for the Warrants.

Pursuant to the terms of the Warrant Agreement, certain amendments, including the Warrant Amendment, require the vote or written consent of holders of at least a majority of the then outstanding (a) Public Warrants (such threshold, the “Public Warrant Consent Threshold”), (b) Private Placement Warrants with respect to modifications or amendments that apply to the Private Placement Warrants (such threshold, the “Private Placement Warrant Consent Threshold”) or any provision of the Warrant Agreement with respect to the Private Placement Warrants, including the Warrant Amendment, and (c) Working Capital Warrants with respect to modifications or amendments that apply to the Working Capital Warrants (such threshold, the “Working Capital Warrant Consent Threshold,”) or any provision of the Warrant Agreement with respect to the Working Capital Warrants, including the Warrant Amendment.

The Offer and Consent Solicitation expired at one minute after 11:59 p.m., Eastern Standard Time, on June 25, 2024.

The Warrants tendered were comprised of 6,529,954 Public Warrants and 504,685 Private Placement Warrants, which represented approximately 78.8% and 10.2% of the outstanding Warrants of each respective class.

The Warrants were validly tendered and not validly withdrawn prior to the expiration of the Offer and Consent Solicitation.

No Working Capital Warrants were tendered.

On July 1, 2024, we issued 2,110,366 shares of Common Stock in exchange for the tendered Warrants.

Pursuant to the Consent Solicitation, the Company received the requisite approval to satisfy the Public Warrant Consent Threshold.

The Company did not receive the approvals necessary to satisfy the Private Placement Warrant Consent Threshold or the Working Capital Warrant Consent Threshold.

As a result, the Warrant Amendment was approved with respect to the Public Warrants but not the Private Placement Warrants or Working Capital Warrants.

Accordingly, on June 26, 2024, the Company and the Warrant Agent entered into the Warrant Amendment, which permits the Company to require that each Public Warrant that remains outstanding following the closing of the Offer be converted into 0.27 shares of Common Stock, which is a ratio 10% less than the exchange ratio applicable to the Offer.

The Warrant Amendment has no effect on either the Private Placement Warrants or the Working Capital Warrants.

Pursuant to the Warrant Amendment, the Company has the right to require the exchange of not less than all of the Public Warrants at any time while such Public Warrants are exercisable and prior to their expiration.

Convertible Preferred Stock

In 2023, we were authorized to issue up to 10,000,000 shares of preferred stock.

On August 10, 2023 (the Business Combination "Closing Date"), we issued 4,015,002 shares of Series A Convertible Preferred Stock for $40.2 million.

The original issue and initial conversion price per share of the Series A Convertible Preferred Stock was $10.00.

The Series A Convertible Preferred Stock accrues cumulative dividends at the rate of 8.00% per annum on the original issue price.

As of December 31, 2024, total undeclared cumulative dividends were $4.4 million.

We have not recorded the undeclared dividends in our consolidated financial statements presented under "Undeclared dividends on Series A preferred stock" in our Consolidated Statement of Operations.

The Series A Convertible Preferred Stock contain a feature to automatically reset the Conversion Price upon each of February 10, 2025, and July 10, 2027, the eighteen-month and forty-seven-month anniversaries of the Closing Date, to be equal to the lower of:

(i) the then-current conversion price, and

(ii) the higher of 1) the Floor Price ($2.10 per share) or 2) the trailing ten-trading day volume weighted average price ("VWAP") of the Common Stock determined as of the date of such reset.

On February 10, 2025, the conversion price was reset to $5.277 based on the trailing ten-Trading Day VWAP of the Common Stock.

As of March 31, 2025, approximately 365,000 shares of Series A Convertible Preferred Stock, including the applicable accrued dividends, have been converted for approximately 778,000 shares of Common Stock.

On February 19, 2026, we entered into an underwriting agreement (the “Underwriting Agreement”) with Lake Street Capital Markets, LLC (“LSCM”), as representative of the underwriters named therein (the “Underwriters”), relating to the public offering (the “Offering”) of 9,756,100 shares (the “Shares”) of common stock of the Company, par value $0.0001 per share (the “Common Stock”), at a price to the public of $4.10 per Share (the “Offering Price”).

Pursuant to the terms of the Underwriting Agreement, the Company also granted the Underwriters a 30-day option to purchase up to an additional 1,463,415 shares of Common Stock (the “Option Shares” and together with the Shares, the “Securities”) to cover over-allotments, if any, at the Offering Price less the underwriting discounts and commissions.

On February 23, 2026, the Offering closed, which resulted in the issuance of the Shares for net proceeds of approximately $37.0 million.

Subsequent to the closing of the Offering, the Underwriters purchased the Option Shares which resulted in additional net proceeds of approximately $5.6 million.

Components of Results of Operations

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Revenue is recognized when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration to which we expect to be entitled in exchange for those products or services.

The primary end-user customers for our products are hospitals, clinics, and physicians, to which we sell directly.

The primary end-user customers for our products are hospitals and clinics, to which we sell directly.

We provide certain customers with rebates that are explicitly stated in our contracts and are recorded as a reduction of revenue in the period the conditions for the rebates are achieved.

The rebates result from performance-based offers that are primarily based on attaining contractually specified sales volumes.

We recognized $ 0.3 million of rebates in the 12 months ended December 31, 2024.

Cost of Goods Sold

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Research and Development

R&D expenses include engineering, regulatory, pre-clinical and clinical activities, including salaries, travel, materials purchased for R&D activities and patent expense.

R&D expenses include engineering, regulatory, pre-clinical and clinical activities, including salaries, travel and materials purchased for R&D activities.

We expense R&D costs as incurred.

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General and Administrative

General and administrative expense includes executive management, finance, information technology, human resources, business development, legal, one-time costs associated with the Business Combination, and the administrative and professional costs associated with those activities.

General and administrative expense includes executive management, finance, information technology, human resources, business development, legal and the administrative and professional costs associated with those activities.

General and administrative costs also include corporate facility costs, including rent, utilities, depreciation and maintenance, not otherwise included in production or R&D expenses, as well as regulatory and professional fees for legal, patent, accounting and other consulting services.

We also record public company costs in general and administrative, including board expenses, insurance, audit fees, Nasdaq fees, and costs associated with public company financial reporting.

Loss on Equity Issuance and Extinguishment of Tranche Liability

Loss on equity issuance represents the excess of the fair value of the warrants to purchase Series B-3 preferred stock and the Series B-2 tranche liabilities over the proceeds received in a preferred stock financing and its subsequent tranche closings.

Interest Income

Interest income is for interest earned on our cash, cash equivalents and restricted cash.

Interest Expense

Interest expense includes mainly the interest incurred on our outstanding indebtedness, as well as amortization of deferred financing costs, mainly exit and commitment fees.

Change in Fair Value of SEPA, Warrant and Revenue Base Redemption Liabilities

Change in fair value of SEPA, Warrant, and Revenue Base Redemption liabilities represents the change in fair value at each reporting period of the SEPA, the Series B-2 tranche liabilities (with accompanying warrants to purchase Series B-3 preferred stock) that were issued in October 2022, the change in fair value of the SPAC Warrants we assumed in the Business Combination, and the change in fair value of the Initial OrbiMed Warrant and Based Redemption Liability issued in connection with the Initial Term Loan under the OrbiMed Credit Agreement entered into in April 2024.

Change in fair value of SEPA, warrant and revenue base redemption liabilities represents the change in fair value at each reporting period of the SEPA, the change in fair value of the Public Warrants, Private Placement Warrants, and Working Capital Warrants (the "Exchange Warrants"), the change in fair value of the OrbiMed Warrants and the change in the revenue base redemption liability.

Change in Fair Value of Contingent Earnout Liability

Change in fair value of contingent earnout liability, which resulted from the issuance of the common stock with certain earnout triggered as part of the Merger Agreement, represents the remeasurement of the liability based on the likelihood of the unvested Common Stock becoming vesting based on reaching certain future common stock price thresholds.

Deemed Dividend Related To Series B-2 Preferred Stock Down Round Provision

The deemed dividend represents the value attributed to the increase in shares of Legacy TriSalus common stock that preferred stockholders received as a result of the Series B-2 preferred stock financing rounds in October 2022, March 2023 and June 2023, which were deemed to be down rounds and triggered the anti-dilution provisions associated with our preferred stock.

The resulting increase in value of the preferred stock was deemed to be a dividend to the preferred stockholders and was recognized as a non-cash adjustment to additional paid-in-capital.

During 2023, the Series B-2 Preferred Stock shares were converted.

Undeclared Dividends On Series A Convertible Preferred Stock

The undeclared dividends represents the value attributed to cumulative dividends associated with the Series A Convertible Preferred Stock.

The cumulative dividends are calculated at the rate of 8.00% per annum on the original issue price of $10.00 per share.

We have not recorded the undeclared dividends in our consolidated financial statements, other than under "Undeclared dividends on Series A Preferred Stock" in our Consolidated Statements of Operations.

Income Tax Benefit (Expense)

Change in fair value of contingent earnout liability represents the remeasurement of the fair value.

Other Expense, Net

Other expense, net represents miscellaneous expenses that historically have been immaterial.

Income Tax Expense

Our income tax provision consists primarily of U.S.

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The following table sets forth our consolidated statements of operations data for each of the periods indicated (in thousands):

Years Ended December 31, 2024 Compared to 2023

Years Ended December 31,

2025 2024 $ Change % Change

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Interest income 555 404 151 37.4%

Interest expense (3,090) (16) (3,074) n.m.

Loss on equity issuance — (5,874) 5,874 (100.0)

Extinguishment of tranche liability — 1,520 (1,520) (100.0)

Change in fair value of warrant, SEPA, and revenue base redemption liabilities (2,107) (10,855) 8,748 80.6

Change in fair value of contingent earnout liability 11,231 10,293 938 9.1

Other expenses, net (312) (378) 66 17.5

Interest expense (5,544) (3,090) (2,454) 79.4%

Change in fair value of SEPA, warrant and revenue base redemption liabilities (4,086) (2,107) (1,979) (93.9)%

Change in fair value of contingent earnout liability (2,743) 11,231 (13,974) n.m.

Other expense, net (456) (312) (144) (46.2)%

Loss before income taxes (39,220) (30,039) (9,181) (30.6)%

Income tax expense (7) (6) (1) (16.7)%

Net loss available to common stockholders $ (30,045) $ (59,363) $ 29,318 49.4%

Deemed dividend related to Series B-2 preferred stock down round provision $ — $ (2,981) $ 2,981.4 100.0%

Undeclared dividends on Series A preferred stock $ (3,188) $ (1,258) $ (1,930) (153.5)%

Net loss attributable to common stockholders $ (33,233) $ (63,602) $ 30,369 47.7%

not meaningful, represented by a percentage change greater than 1,000%, favorable or unfavorable.

Net loss $ (39,227) $ (30,045) $ (9,182) (30.6)%

not meaningful, represented by a percentage change equal to or greater than 100%, favorable or unfavorable.

Comparison of the Years Ended December 31, 2025, and 2024

Revenue increased $15.7 million, or 53.4%, for the year ended December 31, 2025, as compared to the year ended December 31, 2024.

The increase in revenue was due to an increase of TriNav sales volumes.

The increase in revenue was primarily due to an increase of TriNav units sold.

Cost of Goods Sold and Gross Profit

Cost of goods sold increased by $2.9 million, or 69.8%, for the year ended December 31, 2025, as compared to the year ended December 31, 2024.

The increase in cost of goods sold was due to the higher volume of TriNav produced in the period to support the increase in revenue.

Gross profit increased by $9.4 million, or 59.2%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023, and gross margin increased from 85.9% to 86.1%.

The increase in gross profit was driven primarily by higher sales volume.

The increase in gross margin was driven primarily by higher production and yield efficiencies.

Operating Expenses

The increase in cost of goods sold was due to more TriNav units sold.

Gross profit increased by $12.9 million, or 50.8%, for the year ended December 31, 2025, as compared to the year ended December 31, 2024, while gross margin decreased from 86.1% to 84.6% year over year.

The increase in gross profit was due primarily to the increase in TriNav units sold, while the year-over-year decline in gross margin was primarily driven by lower manufacturing efficiency associated with newly launched products, which is a dynamic we expect to improve as production scales and processes mature.

Research and Development

R&D expenses decreased by $2.7 million, or 15.4%, for the year ended December 31, 2025, as compared to the year ended December 31, 2024.

The decrease was primarily due to the completion of certain clinical studies related to nelitolimod in 2024.

The decrease was primarily due to the close-out of clinical trial expenses related to nelitolimod of approximately $2.1 million.

Sales and Marketing

Sales and marketing expenses increased by $2.9 million, or 11.1%, for the year ended December 31, 2025, as compared to the year ended December 31, 2024.

The increase was primarily driven by approximately $6.9 million increase for additional payroll and personnel expenses due to an increase in headcount of sales and marketing personnel to support the growth of TriNav and $1.7 million of additional professional service expense as we increased our sales and marketing efforts in support of the expansion of the sales force.

The increase was primarily due to an increase in performance related compensation driven by the increase in sales during the year ended December 31, 2025 compared to prior year.

General and Administrative Expenses

General and administrative expenses decreased by $5.5 million, or 23.6%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023.

The decrease was due to a $2.5 million decrease in legal, $3.9 million decrease in accounting, and $1.1 million decrease for other professional services due to TriSalus incurring additional fees in 2023 following the Business Combination in the third quarter of 2023.

These were offset by an increase of approximately $2.3 million in stock-based compensation expenses.

General and administrative expenses increased by $3.5 million, or 19.4%, for the year ended December 31, 2025, as compared to the year ended December 31, 2024.

The increase was primarily due to the acceleration of a non-cash stock-based compensation award of approximately $1.8 million, the revision of certain patent-related expenses from research and development to general and administrative expenses of approximately $0.7 million, and professional services as a result of the timing of various filing and audit related expenses.

Interest Income

Interest income was relatively consistent for the year ended December 31, 2025 compared to the year ended December 31, 2024, as the increase was only $0.2 million or 37.4%, due to the increase in interest earned on a higher cash and cash equivalents balance during the year.

Interest Expense

Interest expense increased by $3.1 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023.

The interest expense increase was driven by the addition of the OrbiMed loan in the second quarter of 2024.

Loss on Equity Issuance

There was no recorded loss on equity issuance for the year ended December 31, 2024, compared to a loss of $5.8 million in the year ended December 31, 2023, attributable primarily to the issuance of the Series B-2 preferred stock and the accompanying warrants to purchase Series B-3 preferred stock and related tranche obligations in 2023 with no comparable issuances in 2024.

Change in Extinguishment of Tranche Liability

The change of $1.5 million in extinguishment of the tranche liability was the result of the extinguishment of the Series B-2 tranche liabilities in the year ended December 31, 2023, compared to no extinguishments or other comparable equity activity during the year ended December 31, 2024.

Change in Fair Value of SEPA, Warrant.

and Revenue Base Redemption Liabilities

Interest expense increased by $2.5 million or 79.4% for the year ended December 31, 2025, as compared to the year ended December 31, 2024.

The increase was due to interest on the additional funds borrowed under the First Delayed Draw Term Loan in 2025 that was not present in the prior year.

Change in Fair Value of SEPA, Warrant and Revenue Base Redemption Liabilities

The change in fair value of SEPA, warrant and revenue base redemption liabilities resulted in a loss of $4.1 million in the year ended December 31, 2025, compared to a loss of $2.1 million in the year ended December 31, 2024, a difference of $2.0 million.

The change was driven by the usage of the SEPA and the addition of the warrant and Revenue Base Redemption liability as part of the addition of the OrbiMed Credit Agreement in the second quarter of 2024, and the depreciation of the warrant liabilities, compared to the appreciation of the warrant liabilities in 2023.

The change was primarily due to changes in the Company's stock price and the addition of the Subsequent OrbiMed Warrant as a result of the First Delayed Draw during the first quarter of 2025.

Change in Fair Value of Contingent Earnout Liability

The change in fair value of earnout liability resulted in a gain of $11.2 million for the year ended December 31, 2024 compared to a gain of $10.3 million for the year ended December 31, 2023, due to slightly larger decreases of the TriSalus stock price and risk-free rate valuation inputs in 2024 compared to valuation inputs during the period ended 2023.

Other Income and Expense, Net

Other income and expense, net, decreased by $0.1 million, or 17.5%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to receiving a federal refund identified in 2024 based on the completion and filing of the 2023 tax filings, offset by state increases in taxes due to the increase in 2024 sales.

Income Tax Expense

Our income tax provision consists primarily of U.S.

federal and state income taxes.

We maintain a full valuation allowance for our federal and state deferred tax assets, including net operating loss carryforwards, as we have concluded that it is not more likely than not that the deferred tax assets will be realized.

Deemed dividend related to Series B-2 preferred stock down round provision

The change in the deemed divided related to the Series B-2 preferred stock was a result of the Business Combination on August 10, 2023, with the Series B-2 preferred stock no longer existing;

therefore, we did not have a need to record a deemed dividend for the year ended December 31, 2024.

Undeclared dividend related to Series A convertible preferred stock

The change in the undeclared dividend related to Series A convertible preferred stock was a result of the Series A convertible preferred stock dividends calculated based on a full twelve-months for the year ended December 31, 2024 compared to a partial year for the year ended December 31, 2023.

The change in fair value of contingent earnout liability resulted in a loss of $2.7 million for the year ended December 31, 2025 compared to a gain of $11.2 million for the year ended December 31, 2024.

The change in the fair value of the contingent earnout liability during the period is primarily driven by a change of the following inputs into the valuation of the liability:

the increase in stock price, the shortened achievement time frame for the vesting thresholds and the slight decrease in the risk-free rate.

Other Expense, Net

Other expense, net, increased by $0.1 million, or 46.2%, for the year ended December 31, 2025, as compared to the year ended December 31, 2024.

The expense is relatively flat year over year.

Liquidity and Capital Resources

Since inception, we have incurred significant net losses and expect to continue to incur net losses for the foreseeable future due to the investments we will continue to make in R&D and sales and marketing, and due to additional general and administrative costs we expect to incur as a public company.

We incurred net losses of $30.0 million and $59.4 million for the year ended December 31, 2024, and the year ended December 31, 2023, respectively.

We incurred net losses of $39.2 million and $30.0 million for the years ended December 31, 2025 and December 31, 2024, respectively.

We had cash and cash equivalents of approximately $20.4 million and $8.5 million as of December 31, 2025 and 2024, respectively.

Since inception, we have financed operations primarily through the issuance of preferred stock, convertible notes, and term loans and proceeds from the exercise of warrants.

Since inception, we have financed operations primarily through the issuance of and sales of common and preferred stock, convertible notes, term loans and proceeds from the exercise of warrants.

We are still in our early stages of development and have yet to generate revenues sufficient to fund cash flows from operations.

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If additional capital is not secured when required, we may need to delay or curtail our operations until such funding is received.

We may seek additional capital through a combination of public and private equity offerings, debt financings, strategic partnerships and licensing arrangements.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, existing holders of our securities will be diluted, such offerings may reduce the market price of the Common Stock, and the terms may include a preference on liquidating distributions or a preference on dividend payments or other preferences that adversely affect the rights of holders of our Common Stock.

Thus, existing holders of our securities bear the risk of our future offerings reducing the market price of our Common Stock and diluting their shareholdings in us.

For instance, in October 2023, w e entered into the SEPA with Yorkville , whereby we have the right, but not the obligation, to sell to Yorkville up to $30.0 million of our Common Stock a t our request, subject to terms and conditions specified in the SEPA.

As of this filing of this Annual Report, we have issued and sold 2,290,377 shares of our Common Stock under the SEPA for gross proceeds of approximately $14.1 million.

During the year ended December 31, 2024, we also raised an additional $1.0 million, before expenses, through the sale of Common Stock in a private placement.

In addition, in April 30, 2024, we entered into the OrbiMed Credit Agreement providing for up to $50.0 million in senior secured term debt, of which we immediately drew $25.0 million, before expenses.

Subsequent to December 31, 2024, we borrowed an additional $10.0 million term loan under the OrbiMed Credit Agreement.

Unless we are able to raise additional capital, we do not currently expect that our existing cash and cash equivalents will be sufficient to fund our projected liquidity requirements for the next 12 months, creating substantial doubt about our ability to continue as a going concern.

If we are able to achieve certain targets specified in the Credit Agreement and are then able to draw the remainder of the funds available, and if market conditions allow us to sell additional shares under the SEPA, we believe we can fund our operations through the end of 2025.

We have based these estimates on assumptions that may prove to be wrong and we could use our available capital resources sooner than we currently expect, and future capital requirements and the adequacy of available funds will depend on many factors, including those described in the section titled “ Risk Factors ” in this Annual Report.

See also “Funding Requirements” below.

During the year ended December 31, 2025, we achieved the trailing 12-month Product Revenue Base of $30.0 million in January 2025 and were able to borrow the First Delayed Draw Term Loan Commitment resulting in gross proceeds of $10.0 million.

On November 10, 2025, we entered into the OrbiMed Third Amendment, which lowered the the minimum cash requirement for the liquidity covenant from $10.0 million to $5.0 million.

On April 30, 2025, we raised gross proceeds of approximately $22.0 million through a Private Placement.

On February 23, 2026, we raised net proceeds of $42.6 million through a public offering of shares of our Common Stock, including the purchase of optional shares as per the Underwriting Agreement.

Comparison of the Year Ended December 31, 2025 and December 31, 2024

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Net cash provided by financing activities 30,764 37,936

Net (decrease) / increase in cash, cash equivalents and restricted cash $ (3,252) $ 2,463

Net increase (decrease) in cash, cash equivalents and restricted cash

$ 11,914 $ (3,252)

Cash Used in Operating Activities

For the year ended December 31, 2025, net cash used in operating activities was $18.0 million.

The net cash used in operating activities consisted of net loss of $39.2 million, adjusted for non-cash activity totaling $19.1 million, primarily related to a loss on the adjustment of the fair value of the contingent earnout liability and the fair value of the SEPA, warrant and revenue base redemption liabilities of $2.7 million and $4.1 million, respectively, stock-based compensation of $9.1 million, depreciation of $0.6 million and amortization of debt issuance costs of $1.0 million.

Net operating assets decreased $2.1 million was primarily due to an decrease in inventory, net and prepaid expenses, offset by an increase in trade payables and accrued liabilities and accounts receivable.

For the year ended December 31, 2024, net cash used in operating activities was $40.8 million.

The net cash used in operating activities consisted of net loss of $30.0 million adjusted for non-cash activity totaling $1.2 million, primarily related to a gain on the adjustment of the fair value of the contingent earnout liability of $11.2 million, offset by share-based compensation of $5.4 million and a loss on the adjustment of the fair value of warrants to purchase common stock of $2.8 million.

The increase in net operating assets of $9.5 million was primarily due to an increase in inventory and accounts receivable, offset by a decrease in trade payables and accrued liabilities.

For the year ended December 31, 2023, net cash used in operating activities was $50.6 million.

The net cash used in operating activities consisted of net loss of $59.4 million adjusted for non-cash activity totaling $8.2 million, primarily related to a loss on equity issuance of $5.9 million and a $1.0 million adjustment related to a development milestone payment to Dynavax that is included as an investing cash outflow.

The decrease in net operating assets of $0.5 million was primarily due to the increase of $2.8 million in trade payables and accrued liabilities, offset by the $2.0 million increase in accounts receivable.

Cash Used in Investing Activities

Net cash used in investing activities of $0.8 million for the year ended December 31, 2025 was primarily due to purchases of property and equipment of $0.9 million.

Net cash used in investing activities of $1.6 million for the year ended December 31, 2023 was primarily due to cash paid to Dynavax for a milestone payment under the Dynavax Agreement of $1.0 million and purchases of property and equipment of $0.6 million.

Net cash used in investing activities of $0.3 million for the year ended December 31, 2024 was primarily due to purchases of property and equipment of $0.3 million.

Cash Provided by Financing Activities

Net cash provided by financing activities of $30.8 million for the year ended December 31, 2025, consisted primarily of $20.5 million, net of expenses, from the April 30, 2025 Private Placement and $9.5 million, net of expenses, from the First Delayed draw under the OrbiMed Credit Agreement.

Net cash provided by financing activities of $37.9 million for the year ended December 31, 2024 was due to $22.4 million, net of expenses, from the initial draw down under the OrbiMed Credit Agreement, $14.1 million related to the sale of Common Stock under the SEPA, and $1.0 million, before expenses, through the sale of Common Stock in a private placement.

Net cash provided by financing activities of $54.6 million for the year ended December 31, 2023 consisted primarily of proceeds of $36.9 million from the Business Combination, proceeds of $9.6 million from the exercise of warrants to purchase Series B-3 preferred stock, and proceeds of $9.2 million from the issuance of Series B-2 preferred stock, partially offset by expenses incurred related to the Business Combination of $1.1 million.

Funding Requirements

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If we obtain approval for our product candidates, we expect to incur commercialization expenses, which may be significant, related to establishing or expanding sales, marketing, manufacturing capabilities, distribution and other commercial infrastructure to commercialize such products.

Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations.

Accordingly, we may need to obtain substantial additional funding in connection with our continuing operations.

Inflation and rising interest rates may result in an economic recession globally or in the U.S., which could lead to a reduction in product demand, a decrease in corporate capital expenditures, prolonged unemployment, labor shortages, reduction in consumer confidence, adverse geopolitical and macroeconomic events, or any similar negative economic condition.

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and worldwide resulting from the effects of inflation and rising interest rates.

These conditions have been further exacerbated by recent and potential future disruptions in access to bank deposits or lending commitments due to bank failures, the war in Ukraine and conflicts in the Middle East.

These conditions have been further exacerbated by recent and potential future disruptions in access to bank deposits or lending commitments due to bank failures.

It is not possible at this time to estimate the long-term impact that these and related events could have on our business, as the impact will depend on future developments, which are highly uncertain and cannot be predicted.

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the outcome, timing and cost of the regulatory approval process for nelitolimod by the FDA, including the potential for the FDA to require that we perform more studies and clinical trials than those that we currently expect;

our ability to draw the remaining $15.0 million available under the OrbiMed Credit Agreement if and when needed;

the costs involved in preparing, filing and prosecuting patent applications and annuity fees relating to issued patents;

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Additionally, we are subject to a number of affirmative and restrictive covenants pursuant to the OrbiMed Credit Agreement, which limit or restrict our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

As of March 31, 2025, we will also be required to maintain a minimum cash balance of $10.0 million under the OrbiMed Credit Agreement.

A failure to comply with the terms of the OrbiMed Credit Agreement may result in an event of default , which could result in an acceleration of amounts due under the OrbiMed Credit Agreement.

We may not have sufficient funds or may be unable to arrange for additional financing to repay our indebtedness or to make any accelerated payments, and OrbiMed could seek to enforce security interests in the collateral securing such indebtedness, which would materially harm our business and our stock price.

If we raise funds through additional collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us.

If we are unable to raise additional capital when needed, we may

be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

As of December 31, 2024, we had $8.5 million in cash and cash equivalents.

As of December 31, 2024, we have the right but not the obligation to sell up to $15.9 million of our Common Stock at our request under the SEPA, subject to terms and conditions specified in the agreement.

We will likely require additional capital in the near term in order to continue to fund our operations through equity or debt financings, partnerships, collaborations, or other sources which may not be available on a timely basis, on favorable terms, or at all, and such capital, if obtained, may not be sufficient to enable us to continue to implement our long-term business strategy.

We will likely require additional capital in the near term in order to continue to fund our operations through one or a combination of securities offerings, debt financings, collaborations, strategic alliances and/or licensing arrangements which may not be available on a timely basis, on favorable terms, or at all, and such capital, if obtained, may not be sufficient to enable us to continue to implement our long-term business strategy.

Additionally, we may never become profitable, or if we do, may not be able to sustain profitability on a recurring basis.

If we cannot capitalize on our business opportunities because we lack sufficient capital, our business, financial condition and results of operations could be materially adversely affected and we may need we may need to implement cost cutting measures, which may require us to reduce our marketing and commercialization expenditures for TriNav, discontinue or scale back the development of our product candidates or result in the delay of their development and commercialization, if approved, and other measures, which may materially and adversely impact our business.

Further, we may need to pursue strategic alternatives, including mergers or other transactions, if we are unable to secure additional capital.

Our continuation as a going concern is dependent on our ability to generate sufficient cash flows from operations and/or obtain additional capital through equity or debt financings, partnerships, collaborations, or other sources to carry out our long-term business strategy.

If we are unable to raise additional capital when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves

We may require additional capital in order to continue to fund our operations through one or a combination of securities offerings, debt financings, collaborations, strategic alliances and/or licensing arrangements which may not be available on a timely basis, on favorable terms, or at all, and such capital, if obtained, may not be sufficient to enable us to continue to implement our long-term business strategy.

Our continuation as a going concern is dependent on our ability to generate sufficient cash flows from operations and/or obtain additional capital through equity or debt financings, partnerships, collaborations, strategic alliances and/or licensing arrangements to carry out our long-term business strategy.

If we are unable to continue as a going concern, we may have to liquidate our assets and may receive less than fair value for such assets and less than the value at which such assets are carried on our financial statements, and it is likely that investors will lose all or a part of their investment.

As discussed in Note (1) Nature of Business to our consolidated financial statements included elsewhere in this Annual Report, there is substantial doubt regarding our ability to continue as a going concern as of December 31, 2024 and the date of this Annual Report.

There can be no assurances that we will be successful in any of these respects, or that we will be able to continue to obtain outside capital in the future or do so on terms that are acceptable to us.

Contractual Obligations and Commitments

Our contractual obligations as of December 31, 2025, include lease obligations of $2.0 million, reflecting the minimum commitments for our principal administrative and production facility and other office spaces.

See Note (18) Leases to our consolidated financial statements included elsewhere in this Annual Report for more information on our lease obligations, including the scheduled maturities and timing of cash payments related to these obligations.

Pursuant to the Asset Purchase Agreement, dated July 31, 2020, between TriSalus and Dynavax, we have paid Dynavax $12.0 million as of December 31, 2025, and may be required to pay Dynavax up to an additional $170.0 million upon the achievement of certain development and regulatory milestones with respect to nelitolimod.

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Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, which were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

During the periods presented and currently, we do not have any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, which were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Critical Accounting Policies and Estimates:

Our significant accounting policies are summarized in Note (2) Summary of Significant Accounting Policies in the audited consolidated financial statements included elsewhere in this Annual Report.

While all of these significant accounting policies affect the reporting of our financial condition and results of operations, we view certain of these policies as critical.

Policies determined to be critical are those policies that have the most significant impact on our financial statements and require us to use a greater degree of judgment and/or estimates.

Actual results may differ from those estimates.

Additionally, changes in accounting estimates could occur in the future from period to period.

The preparation of financial statements in conformity with GAAP requires us to make certain estimates and assumptions.

These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the balance sheet date, as well as reported amounts of revenue and expenses during the reporting period.

Our most significant estimates and judgments involve difficult, subjective or complex judgments made by management.

Actual results may differ from these estimates.

To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected.

We believe that the accounting policies described below involve a greater degree of judgment and complexity.

Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our financial condition and results of operations.

For further information, see Note 2 to our consolidated financial statements included in this Annual Report.

Revenue Recognition

Our revenue is derived from shipments of our TriNav infusion devices to our customers which are generally comprised of hospitals, clinics and physicians, and is recognized in accordance with the provisions of the Financial Accounting Standards Board (“FASB”) ASC 606, Revenue from Contracts with Customers , and all related applicable guidance.

Our revenue is derived from shipments of our TriNav infusion devices to our customers which are generally comprised of hospitals and clinics, and is recognized in accordance with the provisions of the Financial Accounting Standards Board (“FASB”) ASC 606, Revenue from Contracts with Customers , and all related applicable guidance.

Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services.

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Revenue is recognized when the units for a purchase order have been shipped and control of the units has transferred to the customer.

Ex-works shipment is followed, wherein we recognize revenue when the shipment leaves our premises.

Freight on Board ("FOB") Shipping is followed, wherein we recognize revenue when the shipment leaves our premises.

In certain cases where purchase orders specify alternate shipping terms, usually delivery at place, revenue recognition is deferred until we are assured the units are delivered.

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Subsequent to a rebate being earned, the customer receives a credit to apply to future purchases.

Warrants Liabilities

Warrant Liabilities

Freestanding financial instruments that permit the holder to acquire shares that are either puttable by the holder, redeemable or contingently redeemable are required to be reported as liabilities in the consolidated financial statements.

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We value the liability for all of the warrants based on the trading price of the publicly held warrants.

In connection with our borrowing under the Initial OrbiMed Credit Agreement, we issued the Initial OrbiMed Warrant, which we classified as a derivative liability because it did not meet the equity classification criteria under ASC 815-40.

We calculated the fair value of the Initial OrbiMed Warrant based on the Black-Scholes-Merton option pricing model.

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In connection with the Business Combination, the sponsor of the public entity agreed that certain of the shares of Common Stock it held would vest upon the achievement of certain share price targets and change in control events.

In accordance with ASC 815-40, Derivatives and Hedging , the earnout shares were classified as a liability as they do not qualify as being indexed to the Company’s own stock and therefore are measured at fair value at each reporting date with changes in fair value recorded in the Consolidated Statements of Operations.

In accordance with ASC 815-40, the earnout shares were classified as a liability as they do not qualify as being indexed to the Company’s own stock and therefore are measured at fair value at each reporting date with changes in fair value recorded in the consolidated statements of operations.

The estimated fair value of the earnout liability was determined using a Monte Carlo simulation valuation model using a distribution of potential outcomes.

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These estimates may be subjective in nature and involve uncertainties and matters of judgment and therefore cannot be determined with exact precision.

Revenue Base Redemption Liability

In connection with the Initial OrbiMed Loan, a “Product Revenue Base” (i.e., with respect to any period, the net revenues for such period from sales of TriNav) on a trailing 12-month basis does not equal or exceed the specified amounts, we will start repaying the outstanding principal amount of the Term Loans.

These required revenue thresholds are referred to as the “Revenue Base Redemption Liability." We determined that we should bifurcate and separately recognize the Revenue Base Redemption Liability.

We determined the value of the Revenue Base Redemption Liability using a Monte Carlo simulation of future revenue and valuing the Initial Term Loan using the with and without method.

The change in fair value of the liability is recorded in the Consolidated Statement of Operations.

See Note (14) Debt for further detail.

Standby Equity Purchase Agreement

In October 2023, the Company entered into a SEPA with Yorkville.

Pursuant to the SEPA, the Company has the right, but not the obligation, to sell to Yorkville up to $30.0 million of shares of Common Stock at the Company’s request any time during the 24 months following the execution of such purchase agreement, subject to certain conditions.

The SEPA, in its entirety, is not classified as a liability pursuant to ASC 480, and is accounted for as a derivative pursuant to ASC 815-10, Derivatives and Hedging ("ASC 815-10").

The SEPA derivative is valued based on a scenario-based valuation model utilizing the expected draws, probability of the draws and risk-free rate inputs.

The change in the fair value of the derivative is recorded in the Consolidated Statements of Operations.

See Note (13) Standby Equity Purchase Agreement for further detail.

Research and Development

R&D costs include our engineering, regulatory, pre-clinical and clinical activities.

R&D costs are expensed as incurred.

Approximately 9% of our R&D costs are headcount-related;

the balance is external services we purchase, such as pre-clinical supplies and materials, clinical study management and supplies, and consulting related to our R&D.

We are required to estimate our expenses resulting from our obligations under agreements with vendors, consultants, and contract research organizations, in connection with conducting R&D activities.

The financial terms of these contracts are subject to negotiations, which vary from agreement to agreement and may result in payment flows that do not match the periods over which goods or services are provided.

We reflect R&D expenses in our consolidated financial statements by matching those expenses with the period in which services and efforts are expended.

We account for these expenses according to the progress of the agreements, along with preparation of financial models, taking into account discussions with research and other key personnel as to the progress of studies or other services being performed.

To date, we have had no material differences between our estimates of such expenses and the amounts actually incurred.

Nonrefundable advance

payments for goods and services are deferred and recognized as expense in the period that the related goods are consumed or services are performed.

Segment Reporting

In 2024, we adopted Accounting Standards Update 2023-07, Improvements to Disclosures About Reportable Segments .

In connection with the adoption of this Update, we re-evaluated our segment and significant expenses utilized by our Chief Operating Decision Maker (“CODM”).

Our CODM, our Chief Executive Officer ("CEO"), reviews our financial information on a consolidated basis for purposes of allocating resources and evaluating its financial performance.

The CEO considers recommendations from the Chief Financial Officer ("CFO") and reviews the Monthly Financial Report ("MFR"), including financial information and the company’s performance highlights, such as revenue, accounts receivable and inventory balances, cash flows and cash on-hand, operational expenditures and headcount.

Based on the Company’s consolidated financial information, the CEO makes the key operating decisions and determines how resources should be allocated.

Once the CEO has decided, the CEO and CFO are responsible for carrying out the CEO’s decisions.

All of our customers and long-lived assets are located in the United States.

Accordingly, we have determined we operate as a single reportable segment within a single geographic area.

Since the Company operates as a single reporting segment, all required segment reporting disclosures can be found in the consolidated financial statements, as presented in Note (2) Summary of Significant Accounting Policies.

Emerging Growth Company Status

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.

The JOBS Act provides that a company can choose not to take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, and any such election to not take advantage of the extended transition period is irrevocable.

We are an emerging growth company and are availing ourselves of the extended transition period that the emerging growth company status permits.

During the extended transition period, it may be difficult or impossible to compare our financial results with the financial results of another public company that complies with public company effective dates for accounting standard updates because of the potential differences in accounting standards used.

We will remain an emerging growth company under the JOBS Act until the earlier of:

(1) the last day of the fiscal year (a) following the fifth anniversary of the closing of MTAC's initial public offering (i.e., December 31, 2025), (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a “large accelerated filer” under the rules of the SEC, which means the market value of our common equity that is held by non-affiliates exceeds $700.0 million as of the end of the prior fiscal year’s second fiscal quarter;

and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

Recent Accounting Pronouncements

Note (2) Summary of Significant Accounting Policies to our audited consolidated financial statements included elsewhere in this Annual Report includes more information about recent accounting pronouncements, the timing of their adoption, and our assessment, to the extent we have made one, of their potential impact on our financial condition and our results of operations.

See Note 2 to our consolidated financial statements included elsewhere in this Annual Report for more information about recent accounting pronouncements, the timing of their adoption, and our assessment, to the extent we have made one, of their potential impact on our financial condition and our results of operations.

Quantitative and Qualitative Disclosures About Market Risk

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Item 7. Management’s Discussion and Analysis